South Korean presidential policy chief faces criminal complaint over leveraged ETF push

A criminal complaint has been filed against Kim Yong-beom, head of policy at South Korea’s presidential office, over allegations that he pushed for the listing of leveraged exchange-traded funds tied to a single semiconductor stock, according to the JoongAng Ilbo, as cited by Odaily.

The complaint alleges abuse of authority, coercion and obstruction of business. The report said these single-stock leveraged ETFs are seen as having amplified market volatility and caused investors to suffer losses worth billions of dollars.

Complaint submitted to prosecutors

Lee Jong-bae, a former Seoul city council member and conservative figure backed by the opposition People Power Party, said he submitted a criminal case against Kim to the Supreme Prosecutors’ Office on Monday through the government’s online petition system.

Lee said Kim had effectively instructed financial regulators to consider launching leveraged ETF products linked to a single chip stock.

FSC review allegedly began in January

Lee also claimed that the Financial Services Commission had been internally reviewing a plan since January. Under that plan, the regulator would establish the necessary regulatory framework and systems in the second quarter, then roll out the products in the second half of the year.

Lee said, “Without Kim Yong-beom’s instruction, financial regulators would not have rushed to introduce leveraged ETFs tied to a single semiconductor stock on the eve of an election while disregarding serious market risk warnings.”